Boards of Directors

As executive-compensation amounts and internal-pay ratios have risen in visibility with and concern among regulators, investors and the general public, boards of directors must pay more attention to how to communicate these metrics effectively and consistently with a company’s broader disclosure efforts.

One of the most critical teams the CEO has to manage is the board, and smart CEOs understand that a well-assembled board can be one of the most potent partners and resources a CEO can have. We recently spoke with Constance Lau, President and CEO of Hawaiian Electric Industries Inc., and Dante C. Parrini, Chairman and CEO of PH Glatfelter Co., to better understand how they partner with their boards. Consider asking yourself the same questions we asked them.

Recent media headlines are shining a spotlight on what seems to be a growing trend over the past few months—that of top leaders suddenly departing their companies. In some cases, we’ve seen a graceful stepping down; in others, sparks have flown between the board of directors and the CEO. Whether the stated reasoning was declining profits, inability to innovate, lack of product strategy or poorly focused investments, each case has a lesson to teach fellow CEOs and company boards about working together, managing expectations and planning succession.

There is no question that the topic of cybersecurity is top of mind for directors and officers of all types of companies. In the wake of cyber breaches, the role of the board of directors in cybersecurity risk management has come into focus in response to increasing regulatory scrutiny and the rising threat of private shareholder litigation.

Just as companies are having to evolve around everything from product delivery to supply chain sourcing, corporate boards, too, are transforming. Certain common themes have emerged in the transformation of company boards’ strategic focus, as well as their structure and make-up.

Shareholder activism has been on the rise for several years and is now at record levels. In this environment, boards must engage with activists through positive dialogue that addresses legitimate concerns, rather than with a defensive reflex reaction. In addition, forward-thinking companies should also re-evaluate and refresh their boards.

Attacks on CEOs of large public companies continue to make the news daily. There are lots of ways for CEOs to try to ward off such threats—and most of them have to do with just running a company the right way, with a clear strategy, optimizing opportunities, minding the bottom line, and being able to think like both shareholders and corporate raiders. But what if the wolf is already at the door, and is winning your loyal constituents over to their side? What can and should CEOs do once an activist shareholder has selected him, her, the board or the company as his prey?

For many CEOs, taking a company public is often part of the longer-term plan. IPO activity remains strong, both globally and in the United States. For example, as of October 20, 2014, 305 IPOs had been priced globally, a year-over-year change of over 50 percent.